📉 The US government is quietly stress-testing an AI bubble burst.
A leaked draft Treasury report (obtained by NOTUS) warns AI companies are more deeply embedded in the economy than dot-com firms were in 2000, and a downturn would send shockwaves through stocks, private credit, chipmakers, and utilities. Two caveats the viral coverage skipped: Treasury disowned the draft, saying it doesn't reflect the department's views, and the report itself says a burst would probably be less severe than the dot-com crash.
The week before, the Bank for International Settlements (the central bank of central banks) named AI spending one of four global pressure points. Hyperscalers are on track to drop over $1 trillion on AI capex across 2025-2026, outpacing their own earnings, and BIS compared the boom to the canal and railway manias that ended in recessions.
The interesting wrinkle: Jensen Huang agrees there's a supply crunch but says that's exactly why a bubble is unlikely within five years. And Buffett, while warning about speculation, just put $31B into Google.
Everyone's nervous. Nobody agrees on what it means.
Treasury Has an Internal Report Warning About the Dangers of an AI Bubble
Publicly, the Trump administration is bullish about AI. Privately, some of its analysts are weighing AI against the dotcom bust.Eric Katz (NOTUS)
Lucas Hendren
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